Transcript Chapter 11 Application for Present-Use Value Application for PUV • The present-use value program is a voluntary program that provides the owner with preferential tax.

Chapter 11
Application for
Present-Use Value
1
Application for PUV
• The present-use value program is a voluntary
program that provides the owner with preferential
tax treatment if the owner and the property meet
the eligibility requirements.
• Acceptance into the program also requires that the
owner and the property continue to meet the
requirements, and failure to do so is generally
subject to financial consequences.
2
Application for PUV
• Therefore, every owner who wishes to claim the
benefits of present-use value must file a proper
and timely application with the tax assessor’s
office.
• Under limited conditions, an untimely application
may be filed.
3
Requirements for a Proper
Application
• A proper application must:
– Clearly show that the property comes within one
of the three present-use value classifications.
– Contain any other relevant information required
by the assessor to properly appraise the property
at its present-use value.
– Be filed in the county in which the property is
located.
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Two Major Categories of
Applications
• Initial applications are required when the property
was not in present-use value at the time of the
transfer of the property, or when the property was
removed from present-use value as a result of the
transfer.
• Applications are required due to a transfer of a
property already in present-use value when the new
owner seeks continued and immediate classification.
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Initial Application
• An initial application is needed when the property
is not currently in present-use value. This may
occur when:
– The property has never been in present-use
value.
– The transfer to the current owner resulted in
removal from the present-use value program.
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Initial Application--Timely
• Initial applications must be filed during one
of the two following time periods to be
timely:
– Regular listing period.
– Within 30 days of a notice of change in value.
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Application Required Due to
Transfer of Property in PUV
• There are several situations where a transfer
of property already in present-use value can
occur that will not necessarily result in the
disqualification of the property from
present-use value.
• Examples of some of those situations are:
(cont’d)
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Application Required Due to
Transfer of Property in PUV
• Transfer to a relative.
• Transfers between combinations of husband and
wife ownerships.
• Transfer from a business entity to one or more of
its members.
• Transfer from a member of a qualifying business
entity to the business entity.
(cont’d)
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Application Required Due to
Transfer of Property in PUV
• Transfer from a trust to a beneficiary of the trust.
• Transfer from a creator of a qualifying trust to the
trust.
• Transfer to a party who is not a relative but where
the new ownership is a qualifying form of
ownership and the new owner meets the
requirements for Continued Use.
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Application Required Due to
Transfer of Property in PUV-Timely
• An application required due to the transfer of the
land must be filed within 60 days of the date of the
property’s transfer.
• If the new owner does not file a new application
within 60 days of the property’s transfer, the
property will be removed from the present-use
value program for failure to file a timely
application.
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Application Required Due to
Transfer of Property in PUV
• If the previous owner chose to remove the
property from present-use value prior to the
transfer, the new owner will have to file an initial
application for the following year during the next
listing period. The new owner will have to meet
all the requirements for initial qualification, and
may or may not be immediately eligible for that
year depending on the specifics of the situation.
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Initial Application--Untimely
• An initial application is untimely if it is
filed after the listing period of the year for
which the benefit is requested, or if it is
filed more than 30 days after a notice of a
change in value.
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Initial Application--Untimely
• Untimely applications may be approved:
1. By the Board of Equalization and Review, or,
if that board is not in session, by the Board of
County Commissioners, and
2. If the applicant can show good cause for
failure to file a timely application.
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Initial Application--Untimely
• Untimely applications apply only to
property taxes levied in the calendar year in
which the untimely application is filed.
• Therefore, untimely initial applications
must be filed before the end of the same
calendar year in which the timely
application should have been filed.
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Application Required Due to
Transfer of Property in PUV-Untimely
• An application for continued eligibility for
property already in present-use value is
untimely if it is filed more than 60 days
after the date of the property’s transfer.
16
Application Required Due to
Transfer of Property in PUV-Untimely
• Whenever a rollback of deferred taxes is billed in any
calendar year, the taxes are considered levied in that
calendar year.
• Therefore, untimely applications required due to
transfer of property already in present-use value may
be filed in any calendar year in which a rollback is
billed and may apply to the years included in the
rollback.
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Signing the Application
• The present-use value program is a voluntary
program that imposes specific requirements on the
owner, as well as specific financial consequences
if those requirements are not met. Therefore, it is
vital that all owners sign the application for
present-use value.
• The following are guidelines for who should sign
the application:
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Signing the Application
• Tenancy in Common—All tenants should sign the
application.
• Husband and Wife as Tenants in Common—Both the
husband and wife should sign the application.
• Husband and Wife as Tenants by the Entirety—
Either the husband or wife may sign the application.
It is preferred that both husband and wife sign so that
both are aware that the property is receiving
preferential
tax
treatment
with
resulting
responsibilities on the owner.
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Signing the Application
• Corporations—Application should be signed by an
officer of the corporation who has authority to
make financial decisions for the corporation.
• Limited Liability Companies—Application should
be signed by an officer of the company who has
authority to make financial decisions for the
corporation.
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Signing the Application
• Partnerships—All partners, both general and
limited, should sign the application.
• Trusts—Application should be signed by the
trustee for the trust.
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Application Examples
22
1-Q
• Owner has owned the property for 10 years
and the property has never been in PUV.
Owner filed an application for PUV on
January 15 of this year. What type of
application has the owner filed? Has the
application been timely filed?
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1-A
• This is an initial application. They are
considered timely if filed during the regular
listing period. The regular listing period
runs from January 1 through January 31, at
a minimum.
• Owner has timely filed the application for
PUV for the current year.
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2-Q
• Owner has owned the property for 10 years
and the property has never been in PUV.
Owner filed an application for PUV on
February 20 of this year. The county has
granted the owner an individual extension
of the listing period until the end of
February. Has the application been timely
filed?
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2-A
• Initial applications are timely if filed during
the regular listing period. The regular
listing period includes any individual
extensions of the listing period.
• Owner has timely filed the application for
PUV for the current year
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3-Q
• Owner has owned the property for 10 years and the
property has never been in PUV. The county
conducted a reappraisal of all real property in the
county effective January 1 of this year. The
reappraisal notices were sent out on February 15 of
this year. Owner filed an application for PUV on
March 10 of this year. There have been no general
extensions of the listing period and the owner did
not request an individual extension of the listing
period. Has the application been timely filed?
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3-A
• If the tax assessor sends a notice of change in value
on a property not currently in use value, the owner
has 30 days from the date shown on the notice of
change in value to timely file an initial application.
The notice may be due to a countywide reappraisal or
a specific change to the property in a non-reappraisal
year. The notice may be due to a change in land
values or building values. Each of these notices will
open a 30-day time period for the owner to timely file
an initial application for present-use value.
• Owner filed the application within 30 days of the date
of notice of change in value and has timely filed the
application for PUV for the current year.
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4-Q
• Owner purchased the property last year but
the prior owner voluntarily removed the
property from PUV prior to transfer. The
deferred taxes were paid at closing. The
owner established the property as his place
of residence prior to January 1 of this year.
Can the owner qualify for PUV this year?
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4-A
• The new owner may be immediately
eligible for PUV this year if certain
requirements are met. A timely application
should be filed during the regular listing
period following the year of removal from
PUV.
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5-Q
• Owner purchased the property last year but
the prior owner voluntarily removed the
property from PUV prior to the transfer. The
deferred taxes were paid at closing. The
owner owns other property in the county
already in PUV under the same classification
and ownership as the purchased property.
What type of application is required? When
should it be filed?
31
5-A
• Since the property is no longer in PUV, the new
owner must file an initial application during the
regular listing period following the year of
disqualification and may qualify under the
Exception for Expansion of Existing Unit.
• In this case, the owner has been granted
immediate eligibility rights, because of the preexisting ownership of other PUV tracts, which can
be claimed by filing an initial application during
the regular listing period following the year of
disqualification.
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6-Q
• Property is in PUV and transfers from a
business entity to one of its members on
May 20 of this year. Member files a new
application on June 30 of this year. Is this a
qualifying transfer? Has the application
been timely filed?
33
6-A
• This transfer is a qualifying transfer per G.S. 105277.3(b)(3) but a new application is required to
maintain PUV status. New applications required
due to transfer of the land must be submitted
within 60 days of the date of the property’s
transfer to be considered timely.
• Member timely filed the new application.
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7-Q
• Property is in PUV and transfers from an
individual to a business entity on May 20 of
this year. The individual is a member of the
business entity. Business entity files a new
application on June 30 of this year. Is this a
qualifying transfer? Has the application
been timely filed?
35
7-A
• This transfer is a qualifying transfer per G.S. 105277.3(b1) but a new application is required to
maintain PUV status. New applications required
due to transfer of the land must be submitted
within 60 days of the date of the property’s
transfer to be considered timely.
• Business entity timely filed the new application.
36
8-Q
• Property is in PUV and transfers from an
individual to a qualifying trust on May 20
of this year. The individual is the creator
of the trust. Trustee of the trust files a new
application on June 30 of this year. Is this a
qualifying transfer? Has the application
been timely filed?
37
8-A
• This transfer is a qualifying transfer per G.S. 105277.3(b1) but a new application is required to
maintain PUV status. New applications required
due to transfer of the land must be submitted
within 60 days of the date of the property’s
transfer to be considered timely.
• Trustee of the trust timely filed the new
application.
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9-Q
• Property is in PUV and transfers from
husband and wife (as tenants by the
entirety) to the wife on May 20 of this year.
Wife files a new application on June 30 of
this year. Is this a qualifying transfer? Has
the application been timely filed?
39
9-A
• This transfer is a qualifying transfer per G.S. 105277.3(b)(2) but a new application is required to
maintain PUV status. Ownership by husband and
wife as tenants by the entirety is a separate
ownership than ownership by either the husband or
wife separately. New applications required due to
transfer of the land must be submitted within 60
days of the date of the property’s transfer to be
considered timely.
• Wife timely filed the new application.
40
10-Q
• Property is in PUV and transfers to a new
owner who wishes to immediately qualify
using the Exception for Continued Use.
Property transfers on January 5 of this year.
The new owner files a new application on
February 1 of this year. Is this a qualifying
transfer? Has the application been timely
filed?
41
10-A
• This transfer is a qualifying transfer per G.S. 105277.3(b2)(1) but a new application is required to
maintain PUV status. New applications required
due to transfer of the land must be submitted
within 60 days of the date of the property’s
transfer to be considered timely.
• The new owner timely filed the new application.
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11-Q
• Father owns tract of land in PUV but
transfers the property to his son. Father
retains a life estate on the tract. Son is the
remainderman. Is an application required in
this situation?
43
11-A
• The owner of the life estate is considered
the owner of the real property. Therefore,
the father remains the owner of the property
and the property continues to qualify. The
assessor might wish to request that the
father file an updated application indicating
his status as owner of the life estate,
however, the statutes do not require it.
44
12-Q
• Owner has owned property for 10 years and
the property has never been in PUV. Owner
filed an application for PUV on January 15
of this year and requested PUV
classification for last year. Should you
allow an untimely application for last year?
45
12-A
• Untimely applications apply only to
property taxes levied in the calendar year in
which the untimely application is filed. The
application cannot be considered since last
year’s taxes were not levied in this calendar
year.
46
13-Q
• Property in PUV transfers from father to
son on May 1 of this year. Son fails to file a
new application within 60 days of the date
of transfer. The assessor notices the failure
to file a new application and bills the
deferred taxes resulting from the
disqualification. The deferred taxes are
billed on October 8 of this year. Can the
son file an untimely application in this year?
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13-A
• Untimely applications apply only to property taxes
levied in the calendar year in which the untimely
application is filed.
• Whenever a rollback of deferred taxes is done in any
calendar year, the taxes are considered levied in that
calendar year. Therefore, untimely applications
required due to transfer of property already in
present-use value may be filed in any calendar year in
which a rollback is done and may apply to the years
included in the rollback.
• Son has until the end of the current calendar year to
file an untimely application.
48
14-Q
• Property transfers from father to son on August 25
of last year. Son fails to file a new application
within 60 days of the date of transfer. This year
the assessor notices the failure to file a new
application and bills the deferred taxes resulting
from the disqualification. The deferred taxes are
billed on July 6 of this year. Can the son file an
untimely application?
49
14-A
• Son has until the end of the current calendar
year to file an untimely application. The
application will apply to the years covered
by the billed deferred taxes since those
deferred taxes were levied in this calendar
year.
50
15-Q
• Property transfers from father to son on
August 25 of two years ago. Son fails to
file a new application within 60 days of the
date of transfer. The assessor has not yet
noticed the failure to file a new application
and the property is still receiving PUV. Can
an untimely application be filed?
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15-A
• Untimely applications apply only to property taxes
levied in the calendar year in which the untimely
application is filed. The assessor has not yet levied the
deferred taxes and the time limit for the untimely
application will not be established until the deferred
taxes are billed.
• The son currently has an undetermined final deadline to
file an untimely application. Until the assessor bills
(levies) the deferred taxes, the son may file an untimely
application at any time. Once the assessor bills (levies)
the deferred taxes, the son has until the end of the
calendar year in which the deferred taxes are billed to
file an untimely application.
52
16-Q
• Property transfers from father to son on August 25
of last year. Son fails to file a new application
within 60 days of the date of transfer. On
December 3 of last year, the assessor notices the
failure to file a new application and sends notice
to the taxpayer of pending disqualification from
PUV. However, the assessor bills the deferred
taxes on January 15 of this year. Can the son file
an untimely application this year?
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16-A
• Whenever a rollback of deferred taxes is done in
any calendar year, the taxes are considered levied
in that calendar year. Notice of removal from
PUV does not suffice in establishing the levy of
the taxes; it is necessary to actually bill the
deferred taxes to create the levy.
• Son has until the end of the current calendar year
to file an untimely application
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